Get more Mail & Guardian
Subscribe or Login

Woolworths results show further slowdown in spending

Woolworth’s interim results reflected a further slowdown in consumer spending, especially in the middle and upper income levels, the listed retailer said on Thursday.

The slowdown was seen in the group’s retail turnover, which grew just 8,1% for the 26 weeks to December 2008.

Profit before tax and exceptional items grew 18,1%, with improved profit from Country Road and one-off benefits arising from the sale of a portion of the Woolworths Financial Services business, the retailer said.

Adjusted headline earnings per share increased 26,9% to 72,2 cents a share and an interim dividend of 31,5 cents a share was declared.

Woolworths retail’s overall sales grew 5,3%.

”We have, with no compromise to the quality, style and innovation that our customers expect from us, introduced more competitive opening price point merchandise,”’ the company said.

However, for the period under review, clothing and general merchandise sales dipped 0,6%.

Childrenswear showed good growth during the period and food sales were up 9,5%.

”Our average food price inflation of 12,1% is well below the average market inflation.

The retailer said that prices were now more competitive and it was better positioned to cater for its customers’ needs.

Woolworths said that total footage grew by 7,1% during the period under review, with an increase of 4,9% in clothing and general merchandise and 14,7% in food at the end of December 2008, compared to the prior year.

Costs were well controlled, growing 1,6%.

Turning to its financial services, Woolworths said that closing debtors’ books at December 2008 were marginally up on the previous year and bad debts were well controlled.

Income yields had improved. The company said its Australian brand, Country Road, had again outperformed the Australian market, delivering excellent sales growth of 22% and growing pre-tax profit by a record 83,8% in Australian dollars.

Looking ahead, Woolworths expected the economy to remain depressed.

”Our challenge will be to continue to manage the impact of the significant shift in consumer spending and the downward pressure on prices, while retaining our difference of quality and innovation,” it said.

Cost and inventory management would be key drivers to manage profitability.

”Despite the relief from recent fuel price cuts and a reduction in the interest rates, we expect trade to remain difficult through the rest of the financial year,” the company warned. — Sapa

Subscribe for R500/year

Thanks for enjoying the Mail & Guardian, we’re proud of our 36 year history, throughout which we have delivered to readers the most important, unbiased stories in South Africa. Good journalism costs, though, and right from our very first edition we’ve relied on reader subscriptions to protect our independence.

Digital subscribers get access to all of our award-winning journalism, including premium features, as well as exclusive events, newsletters, webinars and the cryptic crossword. Click here to find out how to join them and get a 57% discount in your first year.

Related stories


If you’re reading this, you clearly have great taste

If you haven’t already, you can subscribe to the Mail & Guardian for less than the cost of a cup of coffee a week, and get more great reads.

Already a subscriber? Sign in here


Subscribers only

South Africa’s mothballed ‘supermall-ification’ sets strip malls up for success

Analysts agree that the country has enough malls and that, post-Covid, the convenience of local centres lure customers

Mabuza’s Russian jaunts and the slippery consequences of medical tourism

For more than five years the deputy president has remained steadfast in his right to travel abroad to receive medical treatment

More top stories

Deputy president Mabuza begs Tshwane voters: ‘Don’t abandon the ANC’

Angry Atteridgeville residents hurl insults at ‘dysfunctional’ ANC full of ‘corrupt individuals’ as Mabuza fails to placate them with party T-shirts and doeks

Taxi operators clash with cops over disputed Route B97 in...

Three suspects remain in custody following their arrest on charges of attempted murder and assault after eight taxis were impounded

SA teens, you’re next in the queue for a vaccine...

Teenagers between the ages of 12 and 17 will be able to register to receive their Covid-19 jab from 20 October. This group will be given only one dose of the Pfizer vaccine, for now

Former US secretary of state Colin Powell dies aged 84

The 84-year-old died as a result of complications from Covid-19

press releases

Loading latest Press Releases…